The Hindu Business Line : Panel on textile sector moots debt revamp fund

The report has also made a case for introduction of incentives to banks and FIs to restructure existing portfolios of the textile industry so as to reduce the rate of interest to around 8 per cent.

The Finance Minister, Mr Jaswant Singh, showing the copy of the report on textile sector, submitted by the Planning Commission Member, Mr N. K. Singh, in the Capital on Monday. — Kamal Narang

New Delhi , Aug. 11

THE Steering Group on Investment and Growth in Textile Industry has said that about Rs 10,000 crore of the Rs 16,000 crore total term loan exposure of the financial institutions to the textile sector can be restructured to revive the ailing but viable textile units in the country.

The third report of the Steering Group, submitted to the Finance Minister, Mr Jaswant Singh, by the Planning Commission Member, Mr N.K. Singh, here today, has called for the constitution of a debt restructuring fund. The report has also made a case for introduction of incentives to banks and FIs to restructure existing portfolios of the textile industry so as to reduce the rate of interest to around 8 per cent.

As per the proposed restructuring exercise, FIs/banks are expected to reduce the rate of interest of their existing secured loans to a threshold level of 12 per cent per annum. An incentive of maximum 4 per cent would be extended through the proposed Debt Restructuring Fund. It is also envisaged that FIs/banks would waive all penal interest, liquidated damages etc. The restructured loans along with interest would be repaid in a maximum period of 10 years including two-year moratorium. The proposed debt restructuring scheme also covers foreign currency loans.

For profit making units, the Steering Group has also suggested a 10-year repayment period for fresh loans under the Technology Upgradation Fund Scheme.

An official release said that the debt restructuring package is likely to benefit about 350 textile units of total of 500 textile units.

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